Aged care providers in Australia are urging the government to uncap daily fees for wealthier residents in order to save the struggling sector from financial collapse. Catholic Health Australia, Opal Healthcare, Anglicare Sydney, and Southern Cross Care (Qld) have raised concerns that the Basic Daily Fee, which is currently capped at 85 per cent of a single person’s basic pension or $58.98 per day, is inadequate to cover the rising costs of day-to-day services such as meals, cleaning, and laundry, particularly in light of the increased expenses incurred due to the Covid-19 pandemic.
With 70 per cent of residential aged care homes operating at a loss in the third quarter of 2022 and taxpayers bearing a growing portion of the financial burden of the aged care system, the providers are calling for urgent reforms to ensure the sustainability of the sector. They propose that the Basic Daily Fee cap be removed for self-funded retirees, but retained for aged pensioners as a safety net for those with low incomes.
The Basic Daily Fee was originally introduced and capped over 40 years ago in the 1980s as part of reforms to discourage nursing homes from admitting patients who could have been cared for in hostels. However, the aged care providers argue that the cap is outdated and prevents them from covering their costs in the current economic and social context.
Pat Garcia, CEO of Catholic Health Australia, stated that the current fee cap is not fit for purpose and is hindering providers from meeting their expenses. Rachel Argaman, CEO of Opal HealthCare, emphasized that if Australia wants to maintain a quality aged care system that can adequately care for all seniors, including those who can afford to pay more, it makes sense to ask wealthier residents to contribute more towards their care instead of burdening taxpayers further.
The aged care providers are advocating for a fairer and more equitable system that takes into account the actual costs of providing care in today’s context. They believe that the current cap on the Basic Daily Fee is economically unsustainable and no longer relevant. By uncapping the fee for wealthier residents while retaining the safety net for those with low incomes, the providers hope to create a more sustainable aged care system that can ensure dignified care for all Australians in need.